Well, since you are no longer employed you can almost certainly take a distribution from the plan and use the money for whatever you want to, but your retirement balance will suffer if you do this.

Still, sometimes people are only left with this choice. If you were still employed the answer would not be as simple, since your plan may or may not let you take a distribution as a hardship distribution, but since you are not employed by that company, a distribution is possible.

You will pay taxes on the distribution at your normal tax rate and, if you are not yet 59.5 years old, you will pay an additional 10% tax when you file your next tax return.

If you have any other way I would recommend trying it first Because of the potential gains you will miss out on. But if you have no other options, you can take out the money under the "hardships" allowance. I would leave all you can under a IRA so you keep the tax benefits and can begin investing again when things turn around for you. With the way the market is now, you might leave it in an IRA for a while. If the market keeps going down you may get a real nice entry point and be able to make up for the portion you are having to take out now. Good Luck.

If you have any other way I would recommend trying it first Because of the potential gains you will miss out on. But if you have no other options, you can take out the money under the "hardships" allowance. I would leave all you can under a IRA so you keep the tax benefits and can begin investing again when things turn around for you. With the way the market is now, you might leave it in an IRA for a while. If the market keeps going down you may get a real nice entry point and be able to make up for the portion you are having to take out now. Good Luck.

If you have any other way I would recommend trying it first Because of the potential gains you will miss out on. But if you have no other options, you can take out the money under the "hardships" allowance. I would leave all you can under a IRA so you keep the tax benefits and can begin investing again when things turn around for you. With the way the market is now, you might leave it in an IRA for a while. If the market keeps going down you may get a real nice entry point and be able to make up for the portion you are having to take out now. Good Luck.

You may withdraw money, but your specific situation determines how you'll have to go about it, and at what rate you'll be taxed. First, all 401(k) withdrawals are subject to your normal income tax rates, whether you're at retirement age or not. The first thing you should do is see if your situation qualifies for a hardship withdrawal.

This exempts you from the 10% penalty tax normally slapped on by the IRS for individuals under retirement age (59 and 1/2) pulling funds out of their accounts. It doesn't sound like much, but this can really eat away at your money, every time you make a withdrawal.

Otherwise, consider pulling the money out anyway. Try other strategies to mitigate your tax burden, such as donating to charity or writing off expenses for freelance work, until you're able to get another job. A 401(k) loan that you'll need to pay back is probably neither wise nor possible in this situation.

Remember to take out enough money to cover all taxes owed. Many times, state income taxes are not taken out when the money is deducted from your account. You'll need to save enough from your withdrawals to cover these next year, if you have no other income source.

You can take a percentage of your 401k money. However, there will be penalties and you will have to pay fees and even taxes. It is best to not touch 401k money until you retire.

You would definitely qualify for a hardship withdrawal if you're at risk of losing your home. Specifically ask your 401k administrator for a Hardship withdrawal application. You will have to prove your current situation and may have to fax this info back so that it can be processed as soon as possible.

Good luck to you.